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Gold set for first weekly drop in three as yields, dollar strengthen -Breaking


© Reuters. FILEPHOTO: A 99.99% pure gold ingot cast at Krastsvetmet Non-ferrous Metals Plant in Krasnoyarsk (Russia), March 10, 2022. REUTERS/Alexander Manzyuk

By Bharat Gautam

(Reuters) – Gold prices fell on Friday due to the strong U.S. Treasury yields, and the dollar. This also meant that bullion was on track for its first week-end loss in three.

As of 0501 GMT, the price per ounce held steady at $1,952.17 U.S. prices were 0.3% higher at $1,953.90

The outlook for gold looks subdued due to rising rates evidently weight. However, until we break down the trading range (1,930 to below $2,000) convincingly… we don’t really have any direction for it,” stated Michael McCarthy, Chief Strategy Officer at Tiger Brokers Australia.

Benchmark’s gains were extended as Federal Reserve officials took an aggressive tone in tightening policy. It reinforced the notion that the U.S. central banks will increase interest rates as it combats rising inflation. [US/]

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The rising U.S. interest rates short term and the higher yields are highly sensitive to gold, increasing the risk of losing non-yielding bullion.

McCarthy suggested that while a strong U.S. currency could pressure gold, on the contrary, geopolitical uncertainty continues to be a support. The gold price remains stuck between these two opposing currents. [USD/]

The dollar’s strength makes gold-priced greenbacks less desirable to foreign buyers.

This week, gold has fallen 1.2%. The key price of gold rose near $2,000 an ounce Monday due to rising inflation fears and safe-haven supply. But prices have since fallen to their previous two-week low.

Stephen Innes of SPI Asset Management stated that “stagflation has moved from a possible tail risk to a reality,” and added that investors around the world are now turning to gold for portfolio diversification.

Spot silver dropped 0.4% to $24.54 an ounce while platinum fell 0.1% to $968.79. Both are vulnerable to weekly losses. Palladium rose 0.4% at $2,430.95.